“We have some minor disputes, but I don’t think it is a big problem.”

China wants a trade deal, but will defend its interests if necessary

After the latest round of trade talks in Washington last month, the US said it would further postpone planned tariff increases.

The two sides now hope that Chinese President Xi Jinping and his US counterpart Donald Trump will be able to arrange a meeting to finalise an agreement.

Reports suggested that the US has demanded that China will agree not to devalue its currency and open up its financial sector to more foreign investments.

Currency manipulation is one of the contentious issues in the trade negotiations between the two countries. By devaluing the renminbi, China is gaining an advantage as it sells its products overseas at a cheaper price.

But Guo said other nations often misunderstood China’s financial policy, for example by accusing it of manipulating its currency.

“We have tried to maintain the stability of the renminbi, and have not devalued our currency as a tool to gain a trade advantage,” he said.

Speaking at the same event, Commerce Minister Zhong Shan said resolving the trade disputes between China and the US would boost the global economy, saying that the world stock market had jumped following talks between the two presidents in December, during which they agreed to open a 90-day window of negotiation.

Zhong said the latest round of talks had proved difficult because there were still many areas of disagreement and there was much to settle.

China defends belt and road strategy against debt trap claims

But, he said, the talks had been extended from two days to four and had generated momentum for further meetings.

“Our negotiating teams were working overtime and overnight. They worked very hard and professionally,” he said. “It is not easy to achieve such a result, and we should treasure it”.

Both sides still have a lot to do and the two nations have to accommodate each others’ concerns, Zhong said.

China has offered to increase purchases of US goods by US$1.2 trillion over six years, benefiting agriculture and energy. It has also offered to buy more American soybeans after recent substantial purchases.

Billions in tariffs have been levied, but further escalation on $200 billion worth in Chinese goods has been put on hold ahead of a proposed sit-down between Xi and Trump at Mar-a-Lago estate in Florida.

But even as both sides hail “substantial progress” for a trade deal – one that sought to tackle issues including the US trade deficit with China, market access, and state-backed industrial policies – the real issue is the broader competition between the great powers. Some argued it had the characteristics of a cold war, while others described it as a fight for technology supremacy between major powers.

Brock Silvers, managing director at Kaiyuan Capital, said the agreement on financial sector opening measures would be an important achievement, but only one step on the path to a redefined trade relationship.

“The financial market agreement would build momentum and mutual trust, but by itself won’t solve larger trade issues,” he said.

“Once those details are revealed, concerns will shift to the timing of enactment and likelihood of enforcement. The agreement itself will only be a first step,” said Silver. “And while China hasn’t significantly devalued the [yuan] during trade negotiations, it remains to be seen whether Beijing would maintain such equanimity should talks collapse.”

Wang Yong, director of the Centre for International Political Economy, Peking University, said Beijing was eager to rally support from Wall Street through the financial agreement, but added that China would need to ensure that such a deal would not affect stability and security in the financial and economic sector.

“If we are able to reach an agreement over the financial sector, Wall Street will be the first to benefit from the deal and they have been supporting stable US-China relations,” said Wang.

Additional reporting by Catherine Wong